Understanding Business Organizations and Their Functions

This report discusses the definition and outline of three advantages and disadvantages of different types of business organizations, compares and contrasts organizational structures, and explains the impact of business functions such as Human Resource Management, Production, Operations, etc. on organizations and their people. It also defines organizational culture and explains how a positive culture impacts the success of an organization.

Understanding Business
Organizations

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
The definition and outline of three advantages and disadvantages of the different types of
business........................................................................................................................................1
Compare and contrast organizational structures..........................................................................2
Different business functions such as Human Resource Management, Production, Operations,
etc. and the impact of their functional management activities on organizations and the people
within the organizations...............................................................................................................3
Define organizational culture and explain how positive culture impacts on the success of
organization.................................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Business organization can be defined as an entity designed for the persistence of carrying on
commercial enterprise. All these types of organizations can be identified by the structure of law
leading agreements and exchange, property rights and integration. There are basically three of
business organizations like individual proprietorship, partnership or limited liability companies
(Milusheva, 2020). Business organizations are an important part of economic activity as it gives
employment in various sectors like information technology, banking, and insurance etc. In this
report we will discuss about the definition and outline of three advantages and disadvantages of
the different types of business and also compare and contrast the different organizational
structures. The report will also highlight the different business functions such as Human
Resource Management, Production, Operations, etc. and the impact of their functional
management activities on organizations and the people within the organizations. The
organizational culture and how positive culture impacts on the success of an organization will
also be explained in the report.
MAIN BODY
The definition and outline of three advantages and disadvantages of the different types of
business
Business organizations helps in the continuous production of goods and services to the
customers. Business organization explains how business are structured and processed in the
organization and how these strategies help in achieving the goals. There are different types of
business organizations based on how the business id owned, established and operated (Dilli,
Elert, and Herrmann, 2018). The categories of business organizations are sole proprietorship,
partnership and limited companies.
Sole Proprietorship-Sole Proprietorship also known as individual entrepreneurship, sole trader.
In this type of business organization the business is owned and operated by a single individual.
Apart from its simplicity there are many advantages of this like it is an easy and inexpensive
process, it adhere few government regulations and it have the advantage of tax as it is taxed only
once in a year and pay personal income tax on the profit of the business. On the other hand, the
disadvantages are this have unlimited liability of the owner and there are limited options to raise
capital.
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Partnership-In a partnership business organization there is a mutual agreement between
partners for establishing and running the business. This is the most commonly used technique
for running a business in which there are more than one partner and each partner is responsible
for the profit or loss. The advantages of this are it is very simple to establish and dissolve and in
this partnership organizations faces simplified taxes (Hoekstra, and et.al, 2020). The
disadvantages are partners in face potential unlimited liability and partners are responsible for
each other’s actions.
Limited company-limited company is a term which is used for business organization in which
the assets and income of owner are different from the income of company which is also known
as limited liability. The advantages are this adds credibility and trust to the business, tax efficient
and have better lending and investment opportunities. The disadvantages are the organizations
need to pay incorporation fess, company names are subjected to certain restrictions.
In context with this one of the biggest hospitality and tourism industry named as Marriot is a
public limited company whose headquarter is in Bethesda, Maryland. The organization is getting
more success as it is raising capital through public issue of shares and also from growth and
expansion opportunities.
Compare and contrast organizational structures
For running any business organizations there are many types of organizational structures by
which the partners or individuals of the enterprise run their business. The organizational
structure are of two parts which are tall and flat structure. Tall structure is an organizational
structure in which there are multiple level of hierarchy. This is also known as ‘traditional’ or
‘mechanistic’ structure. Flat organization is a type of organizational structure which have limited
number of hierarchy. This is also known as orgiastic structure. The span of control is narrow in
tall organizational structure but in flat organizational structure the span of control is wide.
Promotional opportunities are high in tall organizational structure whereas in flat organizational
structure the promotional opportunities are very limited.in tall structure the cost factor is high as
there are multiple number of employees to handle where as in flat structure cost issue is
relatively low because of limited number of employees in the hierarchy (Nekovee,and
Pinto,2019). More time is required in tall structure because there many levels to consider and in
flat organizational structure the speed of decision is high due to the wide span of control. In tall
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organizational structure there are very few employees to manage therefore the relation between
them is informal but in flat organizational structure the relation is formal as the manager have to
manage many employees(Shindo,2018). The extent of coordination is very good in tall
organizational structure and it is not so good in flat organizational structure. Close supervision
and control is there in tall organizational structure so there is less chance of mistakes whereas in
flat structure due to loose supervision and control chances of mistakes are more. In all
organizational structure the communication is delayed and inaccurate because of many levels of
management but in flat organizational structure the communication is sorted and good.
Different business functions such as Human Resource Management, Production, Operations, etc.
and the impact of their functional management activities on organizations and the people
within the organizations
Business functions in the organization can be defined as the activities done by the entrepreneurs
for carrying out the business. These functions are divided into two parts which are core functions
and support functions. Core business functions are the activities done by an enterprise to making
the income like the production of the material produced for the market or third parties. Support
business functions are the supporting activities which support the core business functions and
the production activities. For performing the business functions many departments are required
like human resource, production, operation etc. Human resource management is the group of
people who help in screening, finding, recruiting and training to the new joiners of the
organization for achieving goals (Laser, 2021). The main aim of human resource management is
to assure the customer satisfaction and helps in generating business for the growth of the
organization. Human resource management provides a clear vision for the development of the
organization .HR makes the employee so talented by giving them trainings and that is beneficial
for the organization as well.
The production department of the business organization is responsible for the manufacturing of
goods or products used to run the business. The production department produce the products
which are further sold out in order to have great revenue. The aim of this department is to ensure
that the price of products are low in order to earn high profit and is also responsible for the
changes and innovations in the productions which influence the customers for buying the
product(Macchi, Savino, and Roda,2020). This is also beneficial for the people within the
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organization as from this teamwork is increased and provide a good job satisfaction to the
employees. Similarly the operation department have the power to make a good impact on the
production of goods or services. This department ensures that all the processes for the
production of product is completed from staring to end. They help the organization in generating
business by providing the best product to the customers. This department also improve the
productivity of the employees as it streamline the employee communication and helps in
reviewing the revenue collection processes. Just like all these department Marriott also have a
very good Human resource and operational department which helps the industry to grow so well.
Proper trainings are provided to the employees by the human resource department in order to
have a good customer satisfaction. The operational department of the organization also have a
good impact on the customers because of the prompt service they are providing.
Define organizational culture and explain how positive culture impacts on the success of
organization.
Organizational culture is defined as the collection of values, expectations and actions that are
required to guide and inform the actions of all the employees in the organization. This is the key
of generating business in the organization. Organization culture helps in providing a positive
working environment and helps in motivating the employees for boosting their confidence
level.in a good organization culture employees are rewarded and recognised for their good
performance and therefore encouraging them to achieve the goals (Macchi, Savino, and Roda,
2020). This also helps the organization in earning profit and good revenue which makes the
organization more successful.by enabling the voice of all team members of the organization one
can provide a good and positive culture and which helps in making new innovations.in an
organization having a good culture is very much required like providing trainings and coaching
to the employee for focusing on learning and development. This impacts the organization so
well in achieving the success of the organization. There are many qualities of a great
organizational culture like there should be alignment between the company’s objective and
employees , appreciation is very essential for boosting the confidence of the employees and
helps in providing a great culture within the organization, culture of trust is also very essential as
the employees can rely on each other , resilience is required where changes are made in a
continuous manner and this helps in making innovations , having a culture of teamwork makes
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collaboration within the organization and the last one is to have a culture of integrity is very
crucial for working together as it builds a trust between the employees and all these actions
taken by the organization helps in making the firm more profitable and productive(Paais, and
Pattiruhu, 2020). Similarly the Marriot also have a very good organizational culture which helps
the employees to perform better and this also helps in retaining the employees as well.
CONCLUSION
From the above report it has been concluded that for generating the revenue the business
organizations are playing a great role. All the different categories of the business organization is
important in generating business and for improving the growth and productivity of the
enterprise. For establishing and operating any business some strategies are required and that
helps the entrepreneurs for making the organization more profitable.in a business organization
business functions plays a vital role in the growth of the organization and a good culture makes
this growth consistent.
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REFERENCES
Books and Journals
Milusheva, V., 2020. Analysis of competitiveness of business organisations. Tarkia Journal of
Sciences, 18(1), pp.401-409.
Dilli, S., Elert, N. and Herrmann, A.M., 2018. Varieties of entrepreneurship: exploring the
institutional foundations of different entrepreneurship types through ‘Varieties-of-
Capitalism’arguments. Small Business Economics, 51(2), pp.293-320.
Hoekstra, F., and et.al, 2020. A review of reviews on principles, strategies, outcomes and
impacts of research partnerships approaches: a first step in synthesising the research partnership
literature. Health Research Policy and Systems, 18(1), pp.1-23.
Nekovee, M. and Pinto, J., 2019. Modeling the impact of organization structure and whistle-
blowers on intra-organizational corruption contagion. Physica A: Statistical Mechanics and its
Applications, 522, pp.339-349.
Shindo, T., 2018. Lightning striking characteristics to tall structures. IEEJ Transactions on
Electrical and Electronic Engineering, 13(7), pp.938-947.
Laser, J., 2021. The importance of vision statements for human resource management–functions
of human resource management in creating and leveraging vision statements. Strategic HR
Review.
Macchi, M., Savino, M. and Roda, I., 2020. Analysing the support of sustainability within the
manufacturing strategy through multiple perspectives of different business functions. Journal of
Cleaner Production, 258, p.120771.
Lubis, F.R. and Hanum, F., 2020, December. Organizational culture. In 2nd Yogyakarta
international conference on educational management/administration and pedagogy (YICEMAP
2019). Atlantis Press (pp. 88-91).
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Paais, M. and Pattiruhu, J.R., 2020. Effect of motivation, leadership, and organizational culture
on satisfaction and employee performance. The Journal of Asian Finance, Economics, and
Business, 7(8), pp.577-588.
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